Maryland is charging towards an emissions-free future. The state plans to generate 100% clean electricity by 2040. With homes and buildings accounting for over 40% of energy use statewide, distributed solar on rooftops plays a major role in Maryland‘s renewable transformation.
This guide serves as an insider‘s look at the policy frameworks, financial incentives, and technical considerations for Maryland residents and businesses to best capitalize on rapidly-improving solar economics. Read on to learn how to maximize savings by locking in ultra-low energy costs for decades to come.
Maryland‘s Ambitious Renewable Energy Vision
Maryland demonstrated its commitment to cleaning up the state‘s electricity mix in 2019 by increasing the Renewable Portfolio Standard (RPS) to 50% by 2030. This means half of Maryland‘s electricity must come from renewable sources like wind, solar, hydropower and geothermal within the next 7 years. Previous targets were just 25% by 2020.
The 2019 Clean Energy Jobs Act also raised the solar carveout – the portion of electricity demand that must be met with solar – from 2.5% to 14.5% by 2030.
As of 2021, renewables like wind and solar supplied about 18% of Maryland’s net electricity generation. Approximately 5% came from solar energy. This illustrates the massive growth still required to reach the new standards. Installing distributed solar on rooftops will play a critical role.
Maryland‘s expanding renewable portfolio standards over time – 50% by 2030! [Sources: 1, 2]
When asked about the goals in a recent interview, governor Larry Hogan emphasized the opportunities created rather than the challenges:
"The Clean Energy Jobs Act provides thousands of good, green collar jobs for hard working Marylanders… our administration remains committed to preserving our environment and providing affordable, reliable energy to fuel our economy."
Utilities like Baltimore Gas & Electric (BGE) echo this win-win perspective:
“BGE supports Maryland’s Clean Energy Jobs Act because it enables continued progress towards the state’s clean energy goals in a way that maximizes benefits for Maryland customers.”
In other words, ambitious state-level commitments to cutting carbon emissions are here to stay. By installing solar panels sooner rather than later, Maryland residents can maximize financial savings while supporting local clean energy jobs.
Solar Panels in Maryland – Pricing and Savings
The value proposition improving rapidly…
Chart showing the levelized cost of solar energy compared to traditional retail electricity rates over time [Source: Our World in Data]
Financial Incentives Sweeten the Deal
From federal tax credits to renewable energy certificates, Maryland has implemented a suite of policies specifically aimed at empowering households to adopt solar energy.
These incentives combined with enjoy special savings related to property taxes, income taxes and more over time.
Let‘s break down each available program and credit accessible to Maryland solar owners.
Federal Solar Tax Credit
The federal Investment Tax Credit (ITC) remains one of the most powerful savings tools for going solar. This program offers a 26% tax credit for systems installed in 2022, and 22% for those installed in 2023.
For a Maryland home installing a $15,000 solar system (after state rebates and incentives), this amounts to $3,900 off your federal tax burden in Year 1.
The ITC lasts for systems installed through 2032, when it drops to 10% permanently.
Homeowners do need to purchase solar systems outright to qualify, as opposed to leasing from a solar company. But with today‘s competitive pricing and financing options more available than ever before, that hurdle is shrinking.
State Rebates and Credits
Maryland offers several solar incentives beyond the federal level:
- Solar Energy Grant Program – receive $1,000 per installed kW, capped at $5,000 per system
- Energy Storage Tax Credit – 30% back up to $5,000 on adding a battery system
- Electric Vehicle Tax Credit – up to $3,000 for purchasing or leasing an EV
The state also offers 0% financing up to $40,000 for solar installations. Apply through the Maryland Clean Energy Capital Program.
In total, a Maryland homeowner could save nearly 50% off solar equipment and installation costs through stacking state and federal incentives.
Property Tax Exemption
Many homeowners worry that adding solar panels will increase their property tax bill. In Maryland, that is not the case.
Solar energy systems are exempt from state and county property taxes. This saves the average homeowner approximately $2,500 over the system lifetime.
Net Metering
Maryland has a strong net metering policy through utility providers like BGE, Pepco and Delmarva Power.
Net metering allows solar households to accumulate credits for excess electricity fed back into the grid during sunny times. Those credits offset electricity pulled from the grid when solar panels aren‘t meeting 100% of demand.
Net metering payouts help recoup upfront solar costs over the long run. Maryland‘s policy carries forward credits month-to-month for a full year before reconciling.
SRECs – Solar Renewable Energy Certificates
Maryland‘s solar renewable energy certificates (SRECs) framework creates an additional revenue stream for solar producers.
Utilities must purchase SRECs from solar system owners in order to fulfill the state‘s RPS carveout. Each SREC represents 1,000 kWh of solar energy generated.
SRECs sell on Maryland‘s open market for average prices around $250 per certificate as of early 2022. A typical 5 kW rooftop solar system might generate 10 SRECs annually. That equates to $2,500 extra income per year over the lifespan – easily another $40,000+ offset towards system costs.
While SREC prices do fluctuate year-to-year, the demand stems from ever-rising state mandates. Maryland‘s solar carveout reaches 18% by 2028 before settling at 14.5% – guaranteeing robust value for solar system owners‘ SREC production.
Breaking Down the Investment
Now that we‘ve explored the various savings levers in Maryland‘s solar policy toolkit, let‘s run the numbers on an example system.
We‘ll look at cost and savings estimates for a 5 kilowatt rooftop array based on current market rates. That system size makes sense for most single family homes using 12,000 – 15,000 kWh of electricity per year.
Upfront Solar Equipment & Installation Costs
- $2.75 per Watt for materials, labor = $13,750
- Federal tax credit of 26% = $3,575
- State solar grant of $1,000
- Net Cost: $9,175
Estimated Savings
- Displaced electricity purchases = $1,500 per year
- Solar renewable credits (10 SRECs annually) = $2,500 per year
- Total annual savings = $4,000
Payback Period
- At $4,000 in annual utility bill reductions plus solar credits earned, the out of pocket investment pays for itself within 3 years!
Clearly, with smart analysis and proper support, solar energy in Maryland can provide outstanding returns.
If we carry out the math over 25 years – a typical lifespan for solar panels – this example household could accumulate over $100,000 in total savings on their electric bills and through SREC performance payments.
Going Solar is A Win-Win in Maryland
In closing, Maryland offers a prime environment financially, politically and technically for distributed solar adoption. With the state actively investing in programs to incentivize households, the benefits for residents are substantial when making the transition to solar energy.
Virtually every Marylander can reduce their environmental footprint while locking in ultra low electricity rates for decades to come. Combined with the sense of energy independence that comes from directly leveraging the sun overhead, solar panels prove a savvy investment on all fronts.
For a personalized analysis on solar‘s potential benefits based on your home‘s unique characteristics, reach out to local experts for quality guidance. The industry has expanded rapidly alongside supportive state policies, but doing diligent research remains key as best offers emerge.
Maryland‘s bold vision ensures that higher and higher clean energy targets will continue driving opportunities around forward-thinking solar adoption. Get ahead of the curve and maximize savings starting now.
